Oregon's Post-WW2 Economic Engine: Higher Education

Russell Sadler

Kirby Dyess, the former Intel executive and vice-chair of the Oregon State Board of Higher Education, retains a zest and enthusiasm for Oregon higher education that has been thoroughly beaten out of nearly everyone else by more than a decade of deliberate fiscal neglect by the Republican legislative leadership.

Dyess is fond of telling anyone who will listen about Ireland’s recent substantial investment in higher education and how it turned that once-poor country into a “Celtic Tiger.” The august editorial page of The Oregonian suggested Oregon legislators go to Ireland “to see firsthand the raw power of higher education.”

The recent history of Ireland’s economic resurgence is indeed a tale to tell. After three and four generations, Irish-Americans descended from the immigrants who fled the Irish Potato Famine of the 1850s returned to the “auld sod” with money made in America. Their investments are creating jobs for Irish higher education graduates.

But Oregon legislators do not have to go to Ireland to see Celtic Tigers. All Oregon legislators need to do to “see firsthand the raw power of higher education” is review the post-World War II history of their own Northwest Tiger.

The growth in size and quality of Oregon public higher education is part of a patrimony created by the GI Bill and a legislative decision to expand all Oregon colleges and universities to accommodate the GIs who returned from World War II and subsequently for the baby boom they spawned. It is arguably the single most important Oregon legislative decision of the postwar era.

Prior to World War II, Oregon was an economic backwater with an economy heavily dependent on agriculture and lumbering. The economy was both cyclical and seasonal.

The GIs returning from Europe and Asia in 1946 returned to a country that had been in a state of privation since 1929, the beginning of the Great Depression, and six years of rationing and price controls during the war. An entire generation had simply put their lives on hold to fight fascism. A grateful nation decided to finance them to a house and a college education.

Thousands of veterans returned to Oregon and thousands of veterans who had served here, moved here. Oregon’s population grew 50 percent during the 1950s.

The enrollment crush was astonishing. The Legislature retooled the Normal Schools in Monmouth, Ashland and LaGrande into liberal arts colleges to meet the demands of veterans.

In Portland, the crush of veterans was handled by private colleges and the Vanport Extension of the State System of Higher Education.

The Vanport Extension was wiped out by a flood in 1948 and eventually relocated to an abandoned high school in downtown Portland. It was renamed Portland State College in 1955 and finally named a university in 1969.

World War II industrialized the American West. It also laid the foundation for Oregon’s emerging high technology industry. Electro-Scientific Industries and Tektronics made electronic equipment for the war effort. When the electronics industry began making technological breakthroughs that spurred its growth, these two companies were able to hire recent Oregon graduates. Still other graduates of Oregon State University and University of Oregon moved south to what became known as Silicon Valley to found or manage companies only to return as philanthropists. Other graduates and their coaches invented running shoes and turned them into an industry.

It is not an exaggeration to say that the expansion of higher education was a principal underpinning of Oregon’s post-World War II prosperity. But Oregon’s patrimony has suffered under the negligent custody of an ungrateful generation over the last two decades.

The present financial problem began during the 1980s recession. The Legislature cut higher education appropriations and forced the Board of Higher Education to raise tuition to make up the difference with the understanding money would be restored when the economy got better.

By the time Oregon’s economy had recovered, however, the Republicans had taken control of both houses of the Legislature.

The Republican mantra of “No New Taxes” only applies to income taxes. Oregon Republicans never saw a fee they didn’t like. Rising tuition dramatically shifted the burden of paying for college onto students, stagnating enrollment and creating the fiscal crisis Oregon’s regional universities face today.

Dyess is calling Gov. Ted Kulongoski’s higher education budget increase a “budget of hope.” It is a modest down payment on repairing 15 years of Republican neglect, but that party is unchastened. Oregon Republicans are already muttering about voting against any increase in taxes to compensate for their decades of deliberate neglect.

  • Levon (unverified)

    The Gov.'s budget document contains some useful factoids:

    During the 1989-91 biennium, Dept. of Higher Ed. budget included over 13% of total general fund/lottery expenditures. The 2005-07 biennium budget was 6% of the total.

    Since the 2001-02 academic year, average tuition for full-time students at Oregon's public universities increased by 38.3%.

    The percentages are even worse for Oregon's community colleges.

    Unless Oregon begins to make serious investments in it's system of higher education - including community colleges - we will continue to miss economic opportunities, have a less civically engaged citizenry, and watch as our neighbors to the north and south prosper.

    Ignorance ain't bliss.

  • YoungOregonVoter (unverified)

    The question is not whether or not we are educating Oregonians. The question is whether we are creating the economy for them to stick around AFTER they get their degrees. As a 22 year-old graduate student in Portland, if there is not a job available here or in Oregon, you can best bet I am and will always move where the money and jobs are.

    Second, I wonder what your opinion of Measure 37 and the loss of industrial land has had on economic opportunity? Last time I looked at the economy here in Portland, all I saw were coffeeshops, beauty salons and dog groomers all spurred by the growth in retirees who want to live here because it is beautiful. Hardly a sustainable economy past the next 30 years. Then again the housing market in 30 years may be pretty damn cheap due to those fueling our service economy "biting the dust."

  • Levon (unverified)


    Your implication that no connection exists is curious. Do you not believe that a more educated workforce would be more likely to create those jobs to which you refer?

    On your second point, you need to look a lot closer. There are many high-tech and manufacturing employers in the state. However, your concern is justified. Absent investments in intellectual capital, lower-wage jobs will increase disproportionately.

  • Steve (unverified)

    Finally something I agree with Mr Sadler on. This state has given short shrift to education for seemingly ever.

    However, when I pick up the Oregonian last week and read about the 20% upside in taxes and that the proportionate increase being sent to education will not reduce student-teacher ratios, I am dis-heartened again. (For ref, the increase will be consumed by teacher benefits.)

    At some point one of our "leaders" is going to have to go mano-a-mano with the public employee unions to ensure money gets spent educating kids. It is not going to be pretty.

  • Thomas Ware (unverified)

    Interesting that while "Oregon’s population grew 50 percent during the 1950s" there was a substantial despora occuring at the time out of Oregon's more rural populations. Not everyone saw much of a future working for Mr. Gilchrest (m'da) or jerking sodas down at Ivan's Corners in LaPine (m'da's ex-wife, at her parent's establishment).

    In the mid-fifties I had two sets of grandparents within twenty miles, aunts, uncles, cousins, second cousins and kissing cousins, the most distant in Burns... when I sought out my roots upon leaving the Army in 1974, there were none. To date, my only family in Oregon are my children and grandchildren.

    Having recently left the employ of Oregon's Higher Education system, I agree it is in disarray and sorely in need of increased funding - there are far too many, predominently republican, stupid people out there. I'd caveat that though with my observation (based upon a fifteen year relationship with Oregon Higher Education) that it has sold out to corporate interests. This may pragmatism in action, but I would remind folks of the old axiom about the so-called liberal media being only as liberal as those who fund it.

    Quite frankly, we would go much farther in informing the Oregon populace if the likes of Lars Larsen and his butt-boy drug-addict Lush Rimjob were banned from the airways.

  • Michael Wilson (unverified)

    There have been a couple of studies that have shown that Oregon's higher education system primarily benefits the well to do and that the private schools do a better job of educating those from the lower income groups. PSU may be the exception because it is in a major city where parrt-time work is available for students. The sad part of this is that the engineering school is located in Corvallis, not exactly a booming metropolis. Yes I know that PSU now offers some engineering course, but that is only recently. It would be interesting to know how many of the gradutes of OU and OSU stayed in the state and developed businesses here. One of the problems is that higher education is subject to the whims of the politcal class. Oregon would be better off just giving the schools the responsibilty for running the lottery and all the profits as well and get the government out of higher education period. There is too much duplication and too few inovative ideas coming from the system. OSU isn't MIT and it never will be as long as it is government sponsored, but it does have a football program. MHW

  • YoungOregonVoter (unverified)


    There would be a connection between more jobs and a higher educated workforce. However, as being in the position myself, I do not see many Oregon graduates creating businesses that employ hundreds or thousands of people. Couple that with political decisions inhibiting economic growth and you can see from my point of view.

    What I do see are graduates who start non-profits with a staff of 5-10 people and fight via grantwriting (taxpayer dollars) to survive economically each year. I see the value of an educated workforce, but if the economic infrastructure meaning long existing, financially sound, forward looking institutions is not in place to employ them when they graduate, then I like many others will leave. I am not going to work myself to death for little gain in a non-profit. Likewise, I will not sit around working in a restaurant or service occupation in Portland for a couple years until the Babyboomers start retiring in droves.

  • Jerry (unverified)

    I am a part-owner in a small high-tech firm in the area. It's hard to recruit people in this area. I don't need people who move here who move because of some "vibe" and move here on some sort of whim because "Portland is cool" but who are totally unqualified. Instead, most of the people who work in our company are out-of-staters, who went to school in Washington, California, or the East Coast, and who have advanced degrees. We have one U of O graduate and he did his post-graduate work on the East Coast. And that's it.

    A top-notch higher education system and good jobs/growing economy go hand in hand.

    We're thinking of launching another enterprise. It's hard to find venture capital in this area. I think that's another reason that there aren't a lot of small to medium sized high-tech firms in this area. But that's another discussion.

  • (Show?)

    However, when I pick up the Oregonian last week and read about the 20% upside in taxes and that the proportionate increase being sent to education will not reduce student-teacher ratios, I am dis-heartened again. (For ref, the increase will be consumed by teacher benefits.)

    And that's why health care is such a critical issue. The biggest cost in education is teachers. The fastest-rising cost in hiring teachers is health care.

    No matter what we do, if the economy is growing at a 3-5% rate, and health care costs are growing at a 17-20% rate, we've got a freight train barreling down the tracks at us. The trainwreck is bound to happen very soon, if it hasn't already.

  • LT (unverified)

    "the 20% upside in taxes and that the proportionate increase being sent to education will not reduce student-teacher ratios, I am dis-heartened again. (For ref, the increase will be consumed by teacher benefits.)"

    So what is the point? That we shouldn't pay benefits to teachers because if they want benefits they should go to another state?

    Just how much of that budget goes to administrator pay and benefits? Don't give me percentages, give me dollars. I live in a district where 3 personnel administrators earn about $100,000 per year. Don't tell me that those administrators don't also get benefits. And are they the same level of benefits as a beginning teacher?

    This is why I thought Jim Hill's idea of outside audits for school budgets was so wise. I also think it is time to have a large public discussion of what the SJ in today's editorial described as "Good ideas include creating a statewide insurance pool for school employees and undertaking a statewide review of teacher and public-employee compensation".

    Of course, that would require a detailed debate which goes beyond "unionized public employees are over paid and underworked" as if everyone working for large employers in the private sector gets lousy pay and benefits for much more work. Put corporate employees in classrooms and see what they think of the difference in the workload.

  • Steve (unverified)

    "No matter what we do, if the economy is growing at a 3-5% rate, and health care costs are growing at a 17-20% rate, we've got a freight train barreling down the tracks at us."

    Sorry, this year health care premiums went down. OMIP decreased its premiums by 15%

    "So what is the point?"

    The point is that if even with a 20% increase in spending and the student is not being helped there are some very basic problems it would seem. If this gets eaten up this quick what happens when the economy goes the other direction?

    I am saying there are a finite amount of funds and someone has to decide how to best spend those on educating students if we want to attract any employers.

  • LT (unverified)

    Steve, Do you know any of your school board members? Have you ever been to a school board meeting or read articles about the local school budget? Do you know what happened last session to the proposal for a statewide healthcare plan for teachers? Did you support it?

    If (as happened in our district before there was a revolt and a majority of new school board members elected) the school district management (supt. and board) hide essentials like the amount of reserve funds or why they gave a bonus to the supt. from the general citizenry, that is a local problem--not the fault of the entire system.

    If you are suggesting hiring teachers without a health care plan, why would the best teachers not move to another state? Or are you just making general comments?

  • (Show?)

    One of the reasons I co-drafted proposed legislation this year is over this topic. The proposal, which came from the work by members of the Legislature's Workforce 2005 Taskforce, deals with the importance of professional-technical education. It runs the gamut of K-16 education and giving students an opportunity to learn the career related learning standards in a different educational environment. I have a dog in this fight. I have taught in a professional technical center for over a decade and students learn math, writing, and reading standards not on paper but while doing. Those classes lead to college credit at the local community colleges. Students learn by doing. Employers make up our advisory panels reviewing curriculum and offering internships and work study.

    If we can get this legislation passed (and it is being supported by Senator Schrader and others) then students in Oregon will learn the core curriculum while learning the essentials needed in the work place and Oregon employers will get employees who understand communication, teamwork, and problem solving through a curriculum that is relevant and rigorous.

    Please ask your local legislator to sign on to make this happen.

  • wharf rat (unverified)

    Hi Folks..

    I was fortunate to attend college when a full load of credits cost about $100 and living expenses were easily covered by my part time job. Having just finished helping my son and his wife through grad school I'm painfully aware of the changes in higher education.

    BUT.....I have to wonder if it is not time to look at the whole university model. The current model is based on the notion of wealthy sons of gentlemen attending the university to socialize with their equally wealthy peers to prepare themselves to lead business and government. Sports, social organizations, ivy covered campuses, etc. don't really have much to do with, if I can correctly name it, the purchase of education.

    I guess I see the purchase of education useful to advancement in the economic sphere as a commodity rather than an experience. If a private university wants to market the whole package the so be it. I'm concerned that every public university and college does the same and at taxpayer and student expense.

    Intercollegiate sports are, for example, costly for students. Many colleges fund them, in part, through student fees which can add several hundred $ per semester. The NCAA notes that fewer than 10 of the Division I-A schools break even or turn a profit on intercollegiate sports.

    Given the existing investment in real estatate I'm not suggesting that we turn our U system into City University. If our goal, though, is a better educated society then maybe we need more, and more efficient, education and less costly frills.


  • Steve (unverified)

    LT - I am making general comments. We go to great pains to say we should trust the representatives we elect and then we get the news that even though we paid 20% more taxes it won't make one bit (or close) of difference in educating our kids, but will buy nicer benefits. They can't/won't do any management and the budget will be another patch job.

    Cost containment has been the lowest priority and it is going to get ignored again with these extra funds. Next downturn and we are back to where we were with poor school funding.

    In this state public employee unions are the most powerful (as measured by getting what they ask for) group. No politician dares to go against them and I think their first interest in their members and not the students.

    Sorry for venting, but I am tired of seeing students getting a raw deal and non-government employees getting their pay/benefits cut. I am only asking to share the pain.

  • geoffludt (unverified)

    In the January 7th edition of the Statesman Journal, Oregon’s Governor, Ted Kulongoski (the Governor) offered his opinion that Oregon’s “Growing economy will benefit all”, but he didn’t mean it in that “rising tide raises all boats” sort of way, more like that “what’s mine is mine and what’s yours is mine also” sort of way. While it is not clear to whom the governors “all” is referring, his laundry list of ‘to-do’s’ leaves little doubt that the transfer they will be receiving is going to be expensive.

    read more here at rightoregon.org

  • Bob Tiernan (unverified)

    Russell Sadler:

    The august editorial page of The Oregonian suggested Oregon legislators go to Ireland “to see firsthand the raw power of higher education

    Bob T:

    That's all we need is more junkets at taxpayer expense (for free vacations for congresscritters). Hasn't the internet made a dent in the need to go on "fact finding" missions? Remember when Ben Canada went to South Africa on a "fact finding" mission? Heck, I had to pay $3,000 of my own money to go there.

    Bob Tiernan

  • j_luthergoober (unverified)

    "Prior to World War II, Oregon was an economic backwater..."

    I got news for ya Oregon, it still is... Just drive around the dead zones out in Washington County to see all the economic prosperity squeezed from offshore labor and cheap water. The only thing Oregon does well is diminish its tax base by issuing abatements to predatory grey pony-tails for historic preservation and free development. Is anyone out there still waiting for our cutting edge bio-engineering business plan to take off in Multnomah County???

  • blikki1 (unverified)

    I find it interesting no one has mentioned the (I believe it was 15%) raise the presidents of the University of Oregon and Oregon State University each received. They are now among the highest paid presidents of public institutions in the country - at a time when student fees are increasing every year.

    I would also like to know the increase in bureacracy versus classroom spending. I have a feeling the results are lopsided. Schools today are investing a previously unheard of amount of money in technology. This is fine if it does the job it has been advertised to do. New software programs are meant to streamline many tasks. Therefore, investment in technology should be followed by the elimination of jobs that are no longer needed. I happen to favor human employment, but then maybe the same number of software packages and techs would not be required.

    Oregon State currently does not have enough money to fund its work study students. Those wages are subsidized by the federal government by approximately 75%. Students need that income and I can't see any reason students can't do the office work many full-time employees do now. Maybe full-time staff with those full-health care benefits should be replaced by students. They would then be able to receive their financial aid while gaining valuable work experience and business contacts.

    Stop asking students (through tuition and fee increases) and taxpayers to pay more before addressing other solutions to help solve the current funding crisis. Like cutting back on expenses - a tactic fiscally responsible people tend to use.

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